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Iron ore valued at Rs1900 crore illegally extracted between ’09-’16: CAG

Porvorim: In what could trigger further trouble for iron ore mining lease holders in the State, the Comptroller Auditor General (CAG) has found the ore worth over Rs 1900 crore was illegally extracted by lease holders between 2009-2016 in violation of the mining plan and Environment Clearances (ECs).CAG has slammed the Union Ministry for Environment and Forest (MoEF), Indian Bureau of Mines (IBM) and the State Directorate of Mines and Geology (DMG) for failing to initiate any action against the violations in cases of unauthorised extraction of minerals thus resulting into loss of revenue of Rs 1904.63 crore to the State exchequer.What is interesting is that fresh extraction of iron ore resumed after a two-year ban, in November 2015 and the CAG has exposed illegal extraction of ore till March 2016.The performance audit on systems and controls in collection of mineral receipts has revealed a number of system and compliance deficiencies, the CAG report which was placed before the State Legislative Assembly on Monday mentions.“We observed violation of the provision of the Acts and Rules made for regulation of mining operation in the State. Violating the provisions of the MCD (Mineral Conservation and Development) rules and MC (Mineral Concession) rules the lessees had extracted minerals valued Rs 1,529.64 crore in excess of the mining plan,” the audit report mentions.
“The lessee had also extracted minerals valued at Rs 374.99 crore in excess of quantity allowed under environment clearances,” it adds.As far as the unauthorised extraction of ore in excess of the quantity approved in the mining plan is concerned, CAG said that MCDR stipulated that mining operations are to be carried out in accordance with the approved plan.“We test checked 38 leases and compared actual extracted quantity with the permissible quantity of ore, mentioned in the approved mining plan. In respect of seven leases, the quantity as per the approved mining plan was 25.94 lakh MT during the period 2009-2013 against this the quantity actually extracted during the period was 98.35 lakh MT. This resulted in unauthorised extraction of 72.41 MT of iron ore valued at Rs1529.64 crore,” the report states.The seven leases belong to Dempo Mining Corporation Ltd, VS Dempo Co Pvt Ltd (two leases), VM Salgaoncar & Bro Pvt Ltd (two leases), Shantilal Kushaldas & Bro Pvt Ltd and Hiralal Khodidas.
“DMG, however, did not take any action for recovery of penalty and stated in August 2016 that action for violations in mining plan is dealt by IBM and the matter is outside its purview,” it stated.On the EC front, CAG said that the audit team test cases to ascertain whether the EC limit has been observed by lessee during the period from 2009-16. “We observed in five cases, the lessee had extracted 30.02 lakh metric tonnes of iron ore valued at Rs 374.99 crore in excess of the EC limit. No reason for extraction of iron ore in excess to EC limit was found,” he said.Here the leases include Sesa Goa Ltd (two leases), NS Narvekar, Geetabala Parulekar and Sociedade Timblo Iramaos Ltd.Here too, DMG, stated that the extraction limit was imposed by MoEF and any violations thereof are to be monitored by MoEF, Regional Office Bangalore.
Further, DMG also stated that the limit of extraction of mineral ore is also imposed in mining plan by IBM.“The reply is not tenable. DMG is responsible for initiating action under Section 21 (5) of the MMDR Act 1957 to recover the mineral or the price thereof,” it said.CAG has recommended that the government devise a system of coordination between the concerned departments responsible for monitoring and enforcing the mining activities in order to regulate the industry.Further the CAG said, “The DMG failed to monitor unauthorised extraction, transportation and storage of minerals effectively. Due to poor monitoring, the short declaration of 27.7 lakh MT iron ore valued Rs 118.01 crore extracted by lease a holder was not detected by the DMG”.The audit report also states that the DMG failed to detect the suppression of closing stock iron ore which resulted in short collection of royalty of Rs 35.53 crore.
“There was lack of internal control within the department to ascertain the lawful dispatch of minerals, independent assessment of grades of ore, internal audit of department and timely assessment of royalty dues. These results in short recovery of royalty to the tune of Rs 19.78 crore,” the CAG has said.“Short collection of stamp duty by the DMG and consequent short collection of registration fee by registration authorities totaling Rs 159.70 crore was also noticed,” it adds. “Coupled with inadequate system of monitoring and poor internal control mechanism the regulation of mining in the State was hampered. It would be in the interest of the State’s revenue, if corrective steps are taken timely to rectify the defects pointed out by the audit,” it adds. [H]

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